'Exempt': College presidents' spending is up to staff, out of state's power

CHARLESTON, W.Va. -- When officials in the State Auditor's Office saw charges for Chicago Bears football tickets, a stay at the Hollywood Hotel, a $416 dinner and multiple alcohol and room service charges on a state travel card, they automatically flagged it as suspicious.

But the card belonged to West Virginia State University President Brian Hemphill, so it was out of the auditor's hands.

That's because when it comes to college presidents, what they can and cannot spend in their position is entirely up to that president's own institution -- even if, in this case, expenses were made using a West Virginia Travel Card permitted "for official use only for the State of West Virginia business," per the card's contract.

Colleges, as well as members of the legislative and judicial branches of state government, are among agencies exempt from state code governing travel and purchasing policies.

According to documents, Hemphill made other purchases typically prohibited on state travel cards that the Auditor's Office refers to as "extras" and outside the scope of "actual costs" of traveling: multiple Patron Margaritas at different restaurants, several hotel movie rentals at $16.99 each, as well as additional hotel fees for pet services, valet parking and mini-bar and gift shop purchases.

"It is up to the university to determine and define official state business," said Kimberly Osbourne, vice president for WVSU Relations and Operations. WVSU officials said the expenses were for "donor cultivation."

The State Auditor's Office recently flagged the account because of purchases "personal or non-travel in nature," before sending it off to be reviewed by the Travel Management Office, according to Justin Southern, communications director for West Virginia State Auditor Glen Gainer.

The issue was resolved as far as the Auditor's Office's jurisdiction goes, Southern said, because the WVSU Foundation -- which administers the college's donations and supports student scholarships -- had reimbursed thousands of dollars for those "personal" charges. Hemphill himself had also paid back some charges to the account.

"If there's something that needs to be done, then [the Travel Management Office] could pull a card away from a person," Southern said. "But I believe that presidents of universities, they have different responsibilities when it comes to entertaining and how they handle things."

The state Travel Management Office did not take any action, though an employee in the office, who wished to remain anonymous, said it was "like robbing Peter to pay Paul."

"[The Foundation] paid for the things that shouldn't have been done," the source said.

The Travel Management Office would reach out to the HEPC in a case like this, according to Southern.

But the HEPC said it was unaware that Hemphill's account had been in question.

While the HEPC sets forth travel and purchasing procedures for institutions to follow based on state statute, the responsibility of auditing a president's expense account lies in the hands of their institution, followed by submission to the auditor's office, according to HEPC spokeswoman Jessica Tice.

According to those HEPC procedural rules on travel, alcoholic beverages and entertainment expenses are specifically excluded, and travel accounts should be used "only for official business" and for "actual costs."

WVSU also has its own policy regarding travel expenses that states, "specifically excluded are alcoholic beverages and entertainment expenses," but school officials said again, presidents are exempt from those rules.

However, higher education is "unique" and "mulitfacted," Tice said, which "requires a level of flexibility that allows the [HEPC] and institutions to be nimble and respond to the needs of students and others we serve."

HEPC Chancellor Paul Hill said WVSU's internal audit of Hemphill's account was sufficient, and praised the president -- an Illinois transplant who took over WVSU in 2012 -- for his work so far.

"Our office has not received notice of purchases made by President Hemphill, nor have we received a request to look into any related activities. It is our understanding, however, that the university has conducted an internal review and that no policies or procedures were violated," Hill said in an email. "Since arriving on campus, President Hemphill has made significantly positive strides -- from increased enrollment to expanded scientific research capacity -- and the commission commends his performance."

WVSU Board of Governors Chairman Tom Susman, president of TSG Consulting -- a public relations and government consulting firm -- and a former member of the West Virginia House of Delegates, said that donor cultivation is especially important for the historically black, land-grant university.

The more than $1,000 in NFL tickets, for example, were for a donor and his wife from Cleveland, who Susman said has contributed more than $50,000 to the school. The trip to Los Angeles was for the annual American Association of State Colleges and Universities conference. Dinners and drinks are for courting current and potential donors.

"What's really important that you need to understand about West Virginia State University is that we have more of a national alumni base than probably some of the other baccalaureate colleges in the state. So we're probably going to do a lot more travel and a lot more donor cultivation," Susman said. "We want [Hemphill] to spend at least half of his time on donor cultivation."

Since Hemphill took over about a year and a half ago for former WVSU President Hazo Carter -- who was pushed out by a no confidence vote after sending the school into a financial spiral -- the school has received $4 million in donations and pledges.

That's compared to an average of $600,000 in years prior, according to Susman.

Susman said that Hemphill used the card based off of guidance given to him by his staff, including himself.

"The board gave him this card. We told him to go do donor cultivation. He's out trying to raise money to help lower tuition, to help build buildings. He's doing all these things we're asking him to do," Susman said. "So if anyone screwed up, he didn't screw up -- the board screwed up."

"I'm not an auditor... but I don't see where the president's done anything wrong," he said.

However, Susman said that this is "a process issue," and that the board -- at Hemphill's request -- plans to consult other college administrations on their purchasing protocol.

Hemphill said that he would make "any appropriate modifications" to the system, and that although no policy was violated to the best of his knowledge, he planned to research all available mechanisms to manage expenses related to his duties.

"Since joining the State family, I have been a strong advocate of excellence, accountability and student-centeredness across all facets of the university. My integrity and reputation, and that of the university, are of the [utmost] importance to me," Hemphill said in an emailed statement through Osbourne. "I strive each and every day to ensure my work, both as a professional and a person, reflects these attributes."

Diane Holley-Brown, communications director for the state Department of Administration, admitted that things can get complicated when dealing with travel and purchasing rules and those exempt agencies.

The account in question is under a statewide contract that prohibits personal use and is to be used for official state travel only, Holley-Brown said, but "higher ed handles their own."

A new computer program in the works that is designed to manage all West Virginia state government financial accounts under one roof may help that, Holley-Brown said.

The "WV Oasis" software, or "Enterprise Resource Planning" will allow agencies to handle financial management with one integrated system.

"There are so many travel rules... many that are exempt and we don't govern the usage," Holley-Brown said. "The new system is going to replace a bunch of systems. There was discussion of having more of a uniform travel policy. I'm not sure if they're going to get there -- to have one, universal travel policy. That's outside of my realm."